Trump Admin Considers Invoking Defense Production Act for Refinery Expansion

The Trump administration is considering invoking the Defense Production Act to expand domestic refining capacity in the US. This move comes as the average price of diesel in the US has surpassed $6 per gallon for the first time, and gasoline prices remain elevated.

According to data from the CFTC, net long positions in WTI crude oil hit a 20-week high, while net long positions in gasoline reached a nine-month high. The operating rate of US refineries has reached approximately 98%, nearing full capacity.

Executives at refining companies have stated that new refineries require several years to become operational and prefer federal funds be directed towards expanding and improving the efficiency of existing facilities, rather than building new ones.